Subbies – how do they price?
Believe it or not – they work twice as hard as you might think
We spend plenty of time talking about how builders should price their jobs, and how to try to capture as much profitability as possible, but what about our subcontractors?
Builders rely heavily (and their QS’s for that matter!) on their subbies getting their pricing through to them so that an entire tender package can be put forward to clients. Poor old subbies have to price twice as much work as builders do….
We have seen EVERYTHING from sub-contractor quotes, from formal tender offerings right through to a number being sent through on email…. With no details at all, including if it had GST added or not!
They’re their own specialist
When baby QS’s go to QS school, we don’t just learn how to measure and price carpentry works, we also get a detailed overview of how all other trades are also measured. NZS4202 (and ASNZSMM2018) provide the same detailed approach to measurement procedure for all trades. Effectively if you understand the guidelines within these standards for measuring carpentry, then you will understand the same for any other trade.
In a nutshell, sub contractor measuring and pricing follows exactly the same principles as carpentry measuring and pricing.
Some sub contractors have their own QS who becomes a specialist in that trade, many others simply rely on their own experience and knowledge to price jobs. These guys are often in the same boat as builders… no one ever teaches them anything about how to price job correctly so they don’t lose money and so that they do protect themselves.
The relationship between builder and sub contractor is hugely important, if it is lacking in communication an entire job can get off track just with scheduling issues, so make sure you keep your sub contractors happy and informed! Also be very careful that any tags and clarifications they place on their quotes to you, are also translated on your quote to your customer.
Value their knowledge
Sub contractors are also a wealth of knowledge when it comes to potential value engineering opportunities (cost saving efforts). They are the nuts and bolts on a project, and may have ideas regarding material or plant swap outs that provide a client with the same functionality for a lower cost. Its far better to have these conversations where you can than look immediately to chop your own margin…..
Help them out where you can
Remember, when your subbie is swamped, and they cannot get a price to you, your next best option is a reasonable provisional sum for their work. If you can, have a yarn to them on the phone so they can have input into a sum that is fair and reasonable rather than just taking a guess yourself. This will help save the awkward conversation with a client when you need to put in a variation for actual costs and the value is significantly different.